#Renzirendum: Italy rejects constitutional reforms, Renzi offers his resignation

Prime Minister Matteo Renzi will tender his resignation this afternoon (5 December) following the rejection by voters of the referendum which proposed profound changes to Italy’s institutions. The far-right Northern League and the anti-Euro ‘Five Star Movement’, who oppose the euro, are calling for early elections, writes Catherine Feore.

Renzi staked his reputation on winning the referendum. Opposition parties and other less-partisan actors criticized the proposed constitutional changes, arguing that they would vest too much power in the executive. The reforms concerned the composition and powers of the parliament - in particular, reforms that it was argued would weaken the Senate, and also concerned the division of powers between the Italian state and Italy’s regions.

The Italian referendum caused concern throughout Europe, particularly among eurozone leaders, who do not want to see further instability. It also comes at a time when Italian banks are trying to deal with non-performing loans and when one of the main opposition parties is opposed to euro membership.

Beppe Grillo’s Five Star Movement is calling for early elections, but Renzi’s resignation will not automatically lead to a general election, it could just mean a change at the top. There are two leading candidates for the role. The highly respected Economy and Finance Minister Pier Carlo Padoan is one possibility. Padoan may be lacking in charisma, but he has been a director of the International Monetary Fund for Italy from 2001 to 2005 and a vice-secretary general of the OECD.

Italy already rejected the technical experience offered by Mario Monti, who was prime minister from 2011-2013 during the banking crisis. In his doorstep remarks at today’s Eurogroup, Commissioner Moscovici singled out Padoan as a strong member of Renzi’s team.

Greens/EFA President Philippe Lamberts said: "Matteo Renzi was mistaken in making this referendum personal, both in terms of reinforcing his own power and in linking the fate of his government to its outcome. In a way, he repeated the mistakes of David Cameron with the Brexit referendum. He now carries the chief responsibility for the political instability his initiative has created, in a context where both his and previous governments have failed to remedy the weaknesses of the Italian banking sector. It is obvious that the misdirected macroeconomic policies carried out in the EU are aggravating Italy's banking woes, but it is also clear that the cosy links between the country's banking and political establishments have so far hampered the necessary clean-up of the sector.

"A priority of the Italian authorities must now be to avoid that an ill-conceived referendum provokes a chain reaction that could endanger the cohesion of the Euro and therefore of the European Union. Beyond this and more fundamentally, with 28% of its population and 32% of its children at risk of poverty or social exclusion, economic and social reforms geared towards a shared and sustainable prosperity must be the focus of any future Italian government."

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